The Hindu Business Line : TN weaving park promoters need to do more for investors

PROMOTERS of hi-tech weaving parks in Tamil Nadu may have to do more convincing work on the proposed powerloom park projects to draw good investor interest.

Apart from the viability factor, the principal promoters behind the powerloom weaving parks should strike a balance while accommodating small-scale powerloom weavers and master-weavers/textile traders as participating industries. This, according to industry sources, will be important to the tempo of implementation of the parks.

With the number of used shuttleless looms in India increasing over the past couple of years (thanks to the one-time special import licence granted by the Ministry of Textiles), many weavers, especially those offering their capacity for job work, are strained over securing a corresponding rise in their conversion charges. These weavers are the major investors in used import looms, the sources said.

According to Somanur- and Tirupur-based powerloom operators who regularly give their capacity for hire on condition of anonymity, between now and last year, the per `pick' rate in the conversion charges obtained by them from master weavers has come down almost by a half, from 27 paise to 14 paise.

Besides the slowdown in job work orders from upcountry textile traders (partly propelled by the removal of the Cenvat structure), the rise in the number of looms that has brought about additional weaving capacity in the last oneyear has also contributed to the lowering of the hire charges.

According to them, some 1,500 used shuttleless looms have been added in Palladam, Somanur and Avanashi areas. Loom imports have also been reported among many existing powerloom factory owners in neighbouring Erode and Namakkal districts, which are also awaiting government clearance for their hi-tech weaving park proposals, as is the case with the Palladam weaving cluster in Coimbatore.

In this scenario, the promoters of these weaving park projects would need to double up efforts to keep up the morale of investors. The expectations of the powerloom weavers willing to participate in these parks could be partly met if the promoters go the extra mile in getting these weavers financial sops such as a higher investment subsidy on capital goods or a higher state subsidy for infrastructure inside the parks.

But the promoters face a dilemma, with the Centre recently refusing to accept one of their strong pleas of raising the ceiling on investment in capital goods for the powerloom weavers from the present Rs 60 lakh to Rs 1 crore for capital subsidy. The weavers' plea to relax the vintage norm fixed for used import loom has also not received any favourable response. A section of the weavers appears hesitant about investing in the park because they who are involved in manufacturing special ranges of woven fabrics do not want to give away their product range. Further, since they have already set their bases elsewhere, expanding their operations to these parks would be a problem..

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